“Bringing GSTN (Goods and Services Tax Network) under the PMLA (Prevention of Money Laundering Act) is a way by the Modi Government to practice, promote, and propagate tax terrorism,” said Dr. Abhishek Singhvi, National Spokesperson AICC, in his press conference on Wednesday. Singhvi called it a highly problematic move for several reasons. He pointed out, «Trade has already fallen to a historic low. This move puts honest and innocent businessmen at the mercy of an organization that has built a reputation for itself as a willing and pliant apparatus of the ruling regime. The inclusion could result in small businesses being investigated by the country›s financial crime agency for GST violations, breaking the bone of the economy. The inclusion will allow information-sharing of all GST taxpayers with the Enforcement Directorate.» «The triplet tactic of constraint, compulsion, and coercion by the BJP through the new law shall wreak havoc on the business community in India. This is another tactic by the BJP to intimidate, incarcerate, and imprison opposition leaders just ahead of the General elections.»
The move to include GSTN under the money laundering law comes amid rising cases of GST fraud and fake registrations. Experts said that under the money laundering provisions, tax authorities will get more power to trace the original beneficiary in case of fraud. The notification by the Finance Ministry has amended an earlier 2006 notification that will facilitate sharing of information between the GSTN, Enforcement Directorate, and other investigative agencies.
In November last year, the government added 15 agencies to this list, including the Competition Commission of India, the National Investigation Agency, the Serious Fraud Investigation Office, the State Police, the Director General of Foreign Trade, the Ministry of External Affairs, the National Intelligence Grid, and the Central Vigilance Commission, among others, for the sharing of information between these agencies and the Enforcement Directorate.